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Stocks, crude rise on hope of revived China demand

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A view of a giant display of stock indexes, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China, October 24, 2022. REUTERS/Aly Song/File Photo

World stocks rose and oil prices rebounded on Thursday on hopes that China’s easing of its anti-COVID measures will help restore global supply chains and curb inflation.

China’s shift in policy, announced on Wednesday, would allow its economic growth to pick up pace, state media CCTV quoted Premier Li Keqiang as saying.

Wall Street rose, lifted by a rally in U.S.-listed shares of Chinese companies, while copper climbed on hopes of increased demand from China, its biggest consumer. Goldman Sachs predicted prices for the metal could hit a record high of $11,000 a tonne in a year.

“The realization that China is going to be back on-line and producing product will help bring down inflation and that’s a good thing. If inflation can come down, the Fed can step aside and pause,” Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, said.

Hong Kong’s Hang Seng (.HSI) rose more than 3% and the yuan traded near a 3-month high , though economists warned that any economic boost could take time to emerge and the relaxation in curbs could temporarily depress demand as infections surge.

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 0.63%, while on Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.52%, the S&P 500 (.SPX) gained 0.69% and the Nasdaq Composite (.IXIC) added 1.04%.

Crude prices seesawed a bit on expectations a key Canada-to-U.S. pipeline will return to service after a leak and put a hefty supply of oil back into the market at a time economic slowdowns around the world have lessened energy demand.

U.S. crude recently rose 0.5% to $72.37 per barrel and Brent was at $77.15, down 0.03% on the day.

The dollar edged lower against the euro as investors weighed the possibility that the Federal Reserve’s tight monetary policy could spark a recession. The euro rose 0.38% to $1.0545.

Treasury yields were higher as investors awaited reports next week on inflation and the Fed’s policy-setting meeting. Global bond yields, which move inversely to their price, have tumbled in recent weeks on expectations slower growth or recessions will slow the rise in rates.

The U.S. consumer price index on Dec. 13 could be pivotal in setting longer-term expectations for the Fed’s monetary policy. (USCPNY=ECI)

The yield on 10-year Treasury notes was up 7.9 basis points to 3.487%, while Germany’s 10-year bond yield rose to 1.835%.

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